EU Wheat Ends Mostly Lower

03/04/12 -- EU grains finished mostly lower with May 12 London wheat down GBP1.75/tonne to GBP172.00/tonne and May 12 Paris wheat falling EUR1.50/tonne to EUR211.50/tonne.

After posting sharp gains Friday and Monday, Chicago grains were a bit subdued today in a mini Turnaround Tuesday. EU wheat, and particularly London wheat, looks too expensive relative to grain from US and other origins around the world.

Rain and snow for Scotland is pushing south bringing a shot of much needed moisture for most areas of the UK by Wednesday afternoon. France too is also seeing some showers across southern and eastern areas, replenishing depleted soil moisture profiles there.

Copa Cogenca peg EU-27 wheat production at 137.2 MMT, 0.2 MMT down on last year, but considerably better than the 134.6 MMT given to us by Coceral on Friday. Barley production will be 53.9 MMT, an increase of 2.2 MMT and corn production will be down 1.2 MMT to 65.1 MMT, they say.

They say that UK wheat output will be 16.3 MMT in 2012, 6% up on last year and see barley production virtually unchanged at 5.5 MMT.

The market has risen substantially since the mid-December lows. Back then Strategie Grains were projecting and EU-27 wheat crop of 142 MMT. The mean of the Copa Cogenca and Coceral estimates fits in with a report by Agritel today suggesting that the winter drought and the February freeze wiped 6 MMT off EU-27 wheat production.

The Rosario Grains Exchange today cut their Argentine corn crop estimate to 19.7 MMT - down 2.3 MMT on the USDA's March number and almost a third lower than the 29 MMT that was expected back in December from what is normally the world's second largest corn exporter.